Yesterday 12 Pacific Rim countries announced that they had struck a deal on the Trans-Pacific Partnership, a sweeping trade deal that has been under negotiation for five years and would serve as the rulebook for 40 percent of global commerce once it goes into effect.
The treaty reduces thousands of tariffs to zero and creates protections for foreign investors. In past trade deals, that has allowed companies to source products from countries where workers don’t have the same protections that they do in the United States. The North American Free Trade Agreement, for example, shunted labor protections to a side agreement that lacked any teeth.
U.S. Trade Representative Michael Froman has long promised that this trade deal would be different: It would require improved working conditions overseas, with punishment for noncompliance, rather than touch off another “race to the bottom.” So will it?
It’s hard to tell; the full text won’t be released to the public for a few weeks. According to a summary provided by the U.S. Trade Representative, the agreement will require notoriously harsh countries — like Vietnam and Brunei — to adopt and implement laws that uphold internationally recognized standards of labor rights.
But as with most rules, the effectiveness will depend on the willingness of parties to enforce them. And if enforcement of similar past deals is any indication, that is by no means inevitable.
So here’s the basic agreement: On day one, countries will have to respect the International Labor Organization’s fundamental rights, which are the ability to join unions and collectively bargain, the abolition of child labor and forced labor, and freedom from employment discrimination. The U.S. baked these standards into its prior agreements with Peru, Panama, Colombia and Korea; the TPP will extend them to Mexico, Japan, Vietnam, Chile, Malaysia, Brunei, Australia, New Zealand and Singapore.
On top of those commitments, before going into effect, the deal requires countries to pass legal standards for occupational safety and health, hours of work, and a minimum wage — though it doesn’t say how high the standards must be set. Parties are bound to “discourage trade in goods produced by forced labor,” though USTR doesn’t specify what form that discouragement will take; an international board will determine whether it’s adequate if the country is challenged. Finally, countries won’t be allowed to weaken those laws for the “special economic zones” that have popped up around ports, where goods are processed more cheaply for export.
A few countries in the agreement have been singled out for special treatment. The U.S. has negotiated separate deals with Vietnam, Malaysia and Brunei spelling out additional legal changes necessary to support the freedom of association and the eradication of human trafficking. Vietnam will have five years to come into full compliance with a new law allowing for the formation of union federations, like the AFL-CIO, but everything else is enforceable immediately.
If all the TPP parties obeyed those rules to the letter, it could represent a substantial advance for labor rights in a fast-growing region. So what happens if they don’t?
The office of the U.S. Trade Representative calls these provisions “enforceable” because they are subject to the same dispute settlement mechanism as every other element of the deal. With exception of the bilateral side deals, any party government can allege a violation, which will be adjudicated by an international panel, and sanctions can be applied if the complaint is found to have merit.
The frequency with which that happens depends on how often governments bring those cases, which can be difficult and time-consuming to document. Nothing obligates any country to bring any case, and the United States’ own record of enforcing those standards in bilateral agreements has been spotty at best. According to a 2014 Government Accountability Office report, although countries have made progress on stepping up enforcement of their own laws, the U.S. has closed only one of these cases since 2008, and has repeatedly blown deadlines for the handful of others still open.
Part of the problem is lack of staff time and money necessary to investigate complaints, and a lot more bandwidth will be needed to police the actions of eight more countries. But an administration also has to be committed to following up — which might not happen under a Republican president, or a Democratic one with other priorities. “We’ve had as much of an issue just with the political will that this administration has shown to bring cases like that,” said Congressional source who spoke on the condition of anonymity. “This is not just a resource issue.”
The USTR says it realizes that the slow pace of enforcement is a problem, and the office is working to streamline and coordinate the efforts of U.S. agencies in order to achieve redress more quickly.
Still, civil society groups lack the resources that companies have at their disposal to lobby governments to take enforcement action on workers' behalf. In addition, through the “investor state dispute settlement” mechanism, corporations can sue governments directly for violations of their rights as investors — the proletariat has no such avenue.
That’s why organized labor isn’t impressed with what USTR achieved beyond what’s known as the “May 10th” agreement, which they struck with the Bush administration in 2007 for additional labor and environmental protections.
“The administration is touting enforceability, but what we’re looking at is actual enforcement,” says Celeste Drake, a trade specialist at the AFL-CIO. “We gave our best, most detailed advice on how to meaningfully improve upon that deal, and what we see here is largely a repeat of May 10th — with small changes in a few places, but nothing that makes it look like it will address the shortcomings.”
Drake says there should be another special enforcement plan with Mexico, and that the side deals with other countries should be part of the main agreement. That’s what private companies get, after all.
“Foreign investors can fend for themselves. They can bring their own cases directly, and workers can’t,” Drake says. “That needs to be explained, why there’s a dual system, and it needs to be rectified."
Going forward, the deal can still change until all the countries sign it, which should happen within the next few weeks. Once that happens, President Obama will submit the treaty to Congress for a vote on ratification, which it must take within 90 days.